Do you have your property by the sea and are you thinking whether to rent it out? Alternatively, are you wondering whether to sell your apartment or have you bought several apartments? These are indeed common questions from our clients and we believe this topic will be of interest to you as well. That’s why we decided to answer these common questions for you.
Taxes and renting an apartment in Bulgaria
There are three ways to rent an apartment: manage the rental yourself, through a management company in your complex, or through an external company. You will be most efficient if you rent your apartment yourself and it depends in which complex, but sometimes it is worth to use the services of an external company and sometimes leave it to the complex. You need to compare the profitability. Generally it is stated that the profit from renting is around 6-7% of the price of the apartment. However, it depends on a number of factors: what the summer will be like, what kind of complex you have (level *), where it is located (distance from the sea), its location, amenities and so on.
Definitely the easiest and least labor intensive way to deal with this is through the complex. Because the complex mostly pays the Profit Tax for you, it is 10% in Bulgaria, of course it will also bill you for it in the annual statement. If you rent the apartment yourself, you are obliged to pay this tax or 10% of the profit yourself. We also recommend that you have your property insured.
Taxes and sale of apartments in Bulgaria
Are you thinking whether to sell your apartment or have bought several properties? We recommend waiting until the introduction of the Euro currency, which is expected in 2025. However, if you need to sell your apartment for various reasons, you need to prepare for this.
If you have owned the property for less than 3 years (natural person) you will pay a tax of 10% on the difference between the purchase and sale price, which is indicated on the Notarial Deed.
If you own two apartments and decide to sell them in one financial or calendar year, the rule of owning an apartment is extended from 3 to 5 years. This means that if you decide to sell both apartments after 4 years, you are obliged to pay a tax of 10% on the difference between the purchase price and the sale price, which is indicated on the notarial deed.
Paying annual tax when owning a property in Bulgaria
When you own a property in Bulgaria you are also obliged to pay the Annual Property Tax, which varies according to the area where your property is located. As a rule it works out to 0.01% – 0.45%.
The first year of ownership of your property you are exempt from paying the tax, however you need to check if the tax was paid by the previous owner in that calendar year. The annual tax can be paid at Easy Pay kiosks at any time during the year. A stranger can also pay it for you, you just need to show your Bulstat number.
We hope we have helped you with this information 😊
